LAS VEGAS – It doesn’t take long to realize how big shopping has become in this desert destination that casino gambling once ruled.
Digital signs inside the Forum Shops at Caesars Palace urge visitors to “Shop as the Romans Do” along a 675,000-square-foot path with a Roman streetscape and talking statues. A model for experiential retailing.
About 29 million people visited the Forum Shops, which marked its 25th anniversary on May 11, while 42.9 million visited Las Vegas last year. That means one out of every two checked out Forum Shops.
Retail and nongaming attractions — along with Vegas shows, 149,000 hotel rooms, and top restaurants and bars — brought in more than $11.2 billion in revenue last year, double the $5.2 billion that table games and slot machines generated.
The appetite for retail is evident up and down the Strip.
MGM Resorts International executives have held discussions to replace the 22 million-gallon Bellagio Fountains with a boutique shopping and restaurant promenade, the Las Vegas Review Journal reported last month.
In 2014, Treasure Island Hotel & Casino drained a lagoon that was used to stage a pirate show in front of the property to convert it into retail, and, in 2015, Bally’s converted a garden into an outdoor mall, the Grand Bazaar Shops, a short walk from Caesars Palace.
The tables turned in 1999, when retail and other nongaming revenue collectively surpassed casino gambling for the first time. The gap has kept growing.
“Retail operations provide greater options for tourist spending, and are a natural evolution for a destination like Las Vegas,” said Brent Pirosch, director of gaming consulting for commercial real estate firm CBRE Inc., who is based here. “While gaming has been fairly flat for years, nongaming attractions jack up revenue and profits, and changing them is “a cost-effective way to refresh a property.”
In 2000, the average trip expenditure for shopping was $94. By 2016, it was $156.91, according to the Las Vegas Convention and Visitors Authority.
Las Vegas’ retail dwarfs Atlantic City’s by virtue of its sheer size, said Deutsche Bank gaming analyst Andrew Zarnett. “There are so many more rooms in Las Vegas, and the average visit to Las Vegas is so much longer,” he said. “Given Atlantic City is primarily a day-tripper market, its ability to emulate on the retail front with Las Vegas is extremely difficult.”
Retail is so hot along the Strip that it is common to find multiple locations of the same brand.
Mike Mixer, executive managing director in Colliers International’s Las Vegas office, said there have been at least three $1 billion-plus sales transactions in the last 12 months for mall properties on the Strip: Crystals at CityCenter, Fashion Show Mall, and the Miracle Mile Shops at the Planet Hollywood resort.
“Both high-end luxury and discount retailers are enjoying success,” Mixer said.
Or want more of it.
Real estate firm JLL highlighted a pair of casino mall projects at the International Council of Shopping Center’s RECon convention here last month. One of them is the Showcase Mall, which sits on the Strip just north of the MGM Grand Hotel with its recognizable 100-foot-tall Coca Cola bottle and giant M&Ms that front the property.
American Eagle Outfitters, Adidas, and T-Mobile are all building flagship stores at the mall, as is DSW. Skechers recently opened. Gone will be the tourist shop Grand Canyon Experience and La Salsa restaurant.
“Vegas is evolving, and retail is evolving,“ said Michael Hirschfeld, co-leader of JLL’s National Retail Tenant Services, as he led a tour of Showcase Mall in 98-degree weather recently. “The brands now want to be here because the people are here, and based on the stats, they’re here shopping.”
Many of the drugstores and restaurants on the Strip are the most profitable locations of their chains nationwide: CVS, Walgreens, Cracker Barrel, and White Castle, to name a few.
“Some high-end luxury retailers on the Strip can justify their high rent and opulent space design by getting their marketing departments to classify a portion of the store’s operating expense as brand marketing,” Mixer said. “Similar to Times Square in New York City, many see value in the everyday exposure the Strip offers.”
It’s ironic that adding retail was a hedge. Las Vegas had to rebrand itself as more than a gambling mecca when the advent of California Indian casinos threatened its desert empire, starting in the 1980s.
In May 1992, Simon Property Group Inc., which owns King of Prussia Mall, unveiled the Forum Shops, a first-of-its-kind retail destination with luxury stores and such celebrity-chef restaurants as Wolfgang Puck’s Spago.
It now houses more than 160 retailers and restaurants and remains among the top-performing enclosed retail centers worldwide, with more than $1,600 in sales per square foot. It spawned copycats: In A.C., the Pier Shops at Caesars, which opened in 2005 and is now named the Playground, as well as the Quarter at Tropicana, were modeled after it.
As part of its silver anniversary, the Forum Shops debuted new retailers and restaurants, including the first-ever Modernist Cuisine Gallery, Lululemon, Magical Memories featuring Disney Fine Art, Harley Davidson, and the Otheroom.
The Forum Shops has undergone two expansions since opening. In 1997 it added a half-million square feet of retail and the Atlantis entertainment feature, which incorporated a 50,000-gallon saltwater aquarium and an animatronic show that has robots emulating animals. In 2004, a three-level expansion added 175,000 square feet of retail and the first freestanding spiral escalator.
Most recently, it added an 85-foot pylon marquee on the Strip and state-of-the-art furniture fixtures, digital directories, and marquee with the ancient Rome theme.
Khalid Waleed, 49, and his wife, Sumaya Abdulatif, 35, who were visiting Las Vegas from Salwa, Kuwait, took it all in recently.
“This is amazing,” Sumaya said, as she stared up at the skyscape from a bench in front of the Fountain of the Gods plaza at Caesar’s, a high-end corridor of shops that includes Giorgio Armani, Versace, Cartier, Louis Vuitton and Gucci.
The couple had also shopped at the Bellagio and CityCenter malls, both influenced by the Forum Shops. But Sumaya, who was folding the shirts she had just purchased from Hermes at the Bellagio and H&M at the Forum Shops, said the Roman-themed plaza was her favorite.
“I love the sky and clouds. It’s so wide and bright,” she said. “It gives you happiness, for sure.”
